1.1 	A bill for an act
1.2 	relating to insurance; reforming two employer health coverage pooling programs; 
1.3 	recodifying them; appropriating money;amending Minnesota Statutes 2004, 
1.4 	sections 43A.316; 43A.317.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 43A.316, is amended to read:
1.7 	43A.316 PUBLIC EMPLOYEES INSURANCE PROGRAM.
1.8 		Subdivision 1.Intent. The legislature finds that the creation of a statewide program 
1.9 	to provide public employees and other eligible persons with life insurance and hospital, 
1.10 	medical, and dental benefit coverage through provider organizations would result in a 
1.11 	greater utilization more efficient use of government resources and would advance the 
1.12 	health and welfare of the citizens of the state.
1.13 		Subd. 2.Definitions. For the purpose of this section, the terms defined in this 
1.14 	subdivision have the meaning given them.
1.15 	(a)  Commissioner. "Commissioner" means the commissioner of employee relations
1.16 	commerce. 
1.17 	(b)  Employee. "Employee" means: 
1.18 	(1) a person who is a public employee within the definition of section  179A.03, 
1.19 	subdivision 14, who is insurance eligible and is employed by an eligible employer; 
1.20 	(2) an elected public official of an eligible employer who is insurance eligible;
1.21 	(3) a person employed by a labor organization or employee association certified as 
1.22 	an exclusive representative of employees of an eligible employer or by another public 
1.23 	employer approved by the commissioner board, so long as the plan meets the requirements 
1.24 	of a governmental plan under United States Code, title 29, section 1002(32); or
2.1 	(4) a person employed by a county or municipal hospital.
2.2 	(c)  Eligible employer. "Eligible employer" means: 
2.3 	(1) a public employer within the definition of section  179A.03, subdivision 15, that 
2.4 	is a town, county, city, school district as defined in section  120A.05, service cooperative 
2.5 	as defined in section  123A.21, intermediate district as defined in section  136D.01, 
2.6 	Cooperative Center for Vocational Education as defined in section  123A.22, regional 
2.7 	management information center as defined in section  123A.23, or an education unit 
2.8 	organized under the joint powers action, section  471.59; or 
2.9 	(2) an exclusive representative of employees, as defined in paragraph (b);
2.10 	(3) a county or municipal hospital; or
2.11 	(4) another public employer approved by the commissioner board.
2.12 	(d)  Exclusive representative. "Exclusive representative" means an exclusive 
2.13 	representative as defined in section  179A.03, subdivision 8. 
2.14 	(e)  Labor-Management Committee Board. "Labor-Management Committee
2.15 	Board" means the committee board established by subdivision 4. 
2.16 	(f)  Program. "Program" means the statewide public employees insurance program 
2.17 	created by subdivision 3. 
2.18 		Subd. 3.Public employee insurance program. The commissioner board shall 
2.19 	be the administrator of the public employee insurance program and may determine its 
2.20 	funding arrangements. The board may contract with a qualified entity to perform the 
2.21 	administrative functions. The commissioner board shall model the program after the plan 
2.22 	established in section  43A.18, subdivision 2, but may modify adopt variations from that 
2.23 	plan, in consultation with the Labor-Management Committee. The variations may include 
2.24 	different deductibles, coinsurance, co-pays, or other enrollee cost-sharing provisions.
2.25 		Subd. 4.Labor-Management Committee Board. The Labor-Management 
2.26 	Committee Board consists of ten members appointed by the commissioner governor. 
2.27 	The Labor-Management Committee Board must comprise five members who represent 
2.28 	employees, including at least one retired employee, and five members who represent 
2.29 	eligible employers. Committee Board members are eligible for expense reimbursement in 
2.30 	the same manner and amount as authorized by the commissioner's plan adopted under 
2.31 	section  43A.18, subdivision 2. The commissioner shall consult with the labor-management 
2.32 	committee in major decisions that affect the program. The committee board shall study 
2.33 	issues evaluate and make decisions relating to the insurance program including, but not 
2.34 	limited to, flexible benefits, utilization review, quality assessment, and cost efficiency. The 
2.35 	committee board continues to exist while the program remains in operation. 
3.1 		Subd. 5.Public employee participation. (a) Participation in the program is subject 
3.2 	to the conditions in this subdivision.
3.3 	(b) Each exclusive representative for an eligible employer determines whether the 
3.4 	employees it represents will participate in the program. The exclusive representative shall 
3.5 	give the employer notice of intent to participate at least 30 days before the expiration date 
3.6 	of the collective bargaining agreement preceding the collective bargaining agreement that 
3.7 	covers the date of entry into the program. The exclusive representative and the eligible 
3.8 	employer shall give notice to the commissioner board of the determination to participate 
3.9 	in the program at least 30 days before entry into the program. Entry into the program is 
3.10 	governed by a schedule established by the commissioner board.
3.11 	(c) Employees not represented by exclusive representatives may become members 
3.12 	of the program upon a determination of an eligible employer to include these employees 
3.13 	in the program. Either all or none of the employer's unrepresented employees must 
3.14 	participate. The eligible employer shall give at least 30 days' notice to the commissioner
3.15 	board before entering the program. Entry into the program is governed by a schedule 
3.16 	established by the commissioner board.
3.17 	(d) Participation in the program is for a two-year term. Participation is automatically 
3.18 	renewed for an additional two-year term unless the exclusive representative, or the 
3.19 	employer for unrepresented employees, gives the commissioner board notice of 
3.20 	withdrawal at least 30 days before expiration of the participation period. A group that 
3.21 	withdraws must wait two years before rejoining. An exclusive representative, or employer 
3.22 	for unrepresented employees, may also withdraw if premiums increase 50 percent or 
3.23 	more from one insurance year to the next.
3.24 	(e) The exclusive representative shall give the employer notice of intent to withdraw 
3.25 	to the commissioner at least 30 days before the expiration date of a collective bargaining 
3.26 	agreement that includes the date on which the term of participation expires.
3.27 	(f) Each participating eligible employer shall notify the commissioner board of the 
3.28 	names of individuals who will be participating within two weeks of after the commissioner
3.29 	receiving board receives notice of the parties' intent to participate. The employer shall 
3.30 	also submit other information as required by the commissioner board for administration 
3.31 	of the program.
3.32 	(g) An exclusive representative or employer that withdraws from the program must 
3.33 	pay to the board, for deposit into the insurance trust fund created in subdivision 9, an 
3.34 	assessment by the board for its pro rata share of any net losses accrued within the program 
3.35 	during the employer's participation in the program. The pro rata share is determined based 
3.36 	upon the premiums paid by that employer as a percentage of total premiums paid by all 
4.1 	employers in the program during that employer's participation, as determined by the 
4.2 	board. An employer that withdraws from the program under circumstances that do not 
4.3 	permit withdrawal under this subdivision is liable to the board for premiums payable by 
4.4 	the employer until the time that the employer is eligible to withdraw and the employer 
4.5 	shall pay those premiums voluntarily and no later than their due date. If the premiums or 
4.6 	pro rata assessments are not paid voluntarily, the board has authority to and shall collect 
4.7 	these premiums under any method permitted by law for a nongovernmental creditor of 
4.8 	the employer.
4.9 		Subd. 6.Coverage. (a) By January 1, 1989, The commissioner board shall 
4.10 	announce the benefits of the program. The program shall include employee hospital, 
4.11 	medical, and dental, and life insurance for employees and hospital and medical benefits for
4.12 	dependents. Health maintenance organization options and other delivery system options 
4.13 	may be provided if they are available, cost-effective, and capable of servicing the number 
4.14 	of people covered in the program. Participation in optional coverages may be provided 
4.15 	by collective bargaining agreements. For employees not represented by an exclusive 
4.16 	representative, the employer may offer the optional coverages to eligible employees and 
4.17 	their dependents provided in the program. Health coverage must include at least the 
4.18 	benefits required of a health plan company regulated under chapter 62A, 62C, or 62D.
4.19 	(b) The commissioner, with the assistance of the Labor-Management Committee,
4.20 	Board shall periodically assess whether it is financially feasible for the program to offer or 
4.21 	to continue an individual retiree program that has competitive premium rates and benefits. 
4.22 	If the commissioner board determines it to be feasible to offer an individual retiree 
4.23 	program, the commissioner board shall announce the applicable benefits, premium rates, 
4.24 	and terms of participation. Eligibility to participate in the individual retiree program 
4.25 	is governed by subdivision 8, but applies to retirees of eligible employers that do not 
4.26 	participate in the program and to those retirees' dependents and surviving spouses.
4.27 		Subd. 6a.Chiropractic services Choice of providers. All benefits provided by the 
4.28 	program or a successor program relating to expenses incurred for medical treatment or 
4.29 	services of a physician health care provider must also include chiropractic treatment and 
4.30 	services of a chiropractor any other licensed, certified, or registered health care provider to 
4.31 	the extent that the chiropractic services and treatment are within the scope of chiropractic 
4.32 	licensure the provider's licensure, certification, or registration.
4.33 	This subdivision is intended to provide equal access to benefits for program members 
4.34 	who choose to obtain treatment for illness or injury from a doctor of chiropractic, as long 
4.35 	as the treatment falls within the chiropractor's scope of practice. This subdivision is not 
4.36 	intended to change or add to the benefits provided for in the program.
5.1 		Subd. 7.Premiums. The proportion of premium paid by the employer and 
5.2 	employee is subject to collective bargaining or personnel policies. If, at the beginning of 
5.3 	the coverage period, no collective bargaining agreement has been finalized, the increased 
5.4 	dollar costs, if any, from the previous year is the sole responsibility of the individual 
5.5 	participant until a collective bargaining agreement states otherwise. Premiums, including 
5.6 	an administration fee, shall be established by the commissioner board. The board may 
5.7 	decide to rate specific employers separately for premium purposes, if the board determines 
5.8 	that doing so is in the best interests of the program. Each employer shall pay monthly 
5.9 	the amounts due for employee benefits including the amounts under subdivision 8 to the 
5.10 	commissioner board no later than the dates established by the commissioner board. If an 
5.11 	employer fails to make the payments as required, the commissioner may board shall
5.12 	cancel program benefits and pursue other civil remedies, as provided in subdivision 5, 
5.13 	paragraph (d).
5.14 		Subd. 8.Continuation of coverage. (a) A former employee of an employer 
5.15 	participating in the program who is receiving a public pension disability benefit or an 
5.16 	annuity or has met the age and service requirements necessary to receive an annuity under 
5.17 	chapter 353, 353C, 354, 354A, 356, 422A, 423, 423A, or 424, and the former employee's 
5.18 	dependents, are eligible to participate in the program. This participation is at the person's 
5.19 	expense unless a collective bargaining agreement or personnel policy provides otherwise. 
5.20 	Premiums for these participants must be established by the commissioner board.
5.21 	The commissioner board may provide policy exclusions for preexisting conditions 
5.22 	only when there is a break in coverage between a participant's coverage under the 
5.23 	employment-based group insurance program and the participant's coverage under this 
5.24 	section. An employer shall notify an employee of the option to participate under this 
5.25 	paragraph no later than the effective date of retirement. The retired employee or the 
5.26 	employer of a participating group on behalf of a current or retired employee shall notify 
5.27 	the commissioner board within 30 days of the effective date of retirement of intent to 
5.28 	participate in the program according to the rules established by the commissioner board.
5.29 	(b) The spouse of a deceased employee or former employee may purchase the 
5.30 	benefits provided at premiums established by the commissioner board if the spouse was 
5.31 	a dependent under the employee's or former employee's coverage under this section at 
5.32 	the time of the death. The spouse remains eligible to participate in the program as long 
5.33 	as the group that included the deceased employee or former employee participates in the 
5.34 	program. Coverage under this clause must be coordinated with relevant insurance benefits 
5.35 	provided through the federally sponsored Medicare program.
6.1 	(c) The program benefits must continue in the event of strike permitted by section  
6.2 	179A.18, if the exclusive representative chooses to have coverage continue and the 
6.3 	employee pays the total monthly premiums when due. 
6.4 	(d) A participant who discontinues coverage may not reenroll.
6.5 	(d) Persons participating under these paragraphs this subdivision shall make 
6.6 	appropriate premium payments in the time and manner established by the commissioner
6.7 	board.
6.8 		Subd. 9.Insurance trust fund. (a) The insurance trust fund in the state treasury 
6.9 	consists of deposits of the premiums received from employers participating in the 
6.10 	program and transfers before July 1, 1994, from the excess contributions holding account 
6.11 	established by section  353.65, subdivision 7. All money in the fund is appropriated to the 
6.12 	commissioner board to pay insurance premiums, approved claims, refunds, administrative 
6.13 	costs, and other related service costs. Premiums paid by employers to the fund are exempt 
6.14 	from the taxes imposed by chapter 297I. The commissioner board shall reserve an amount 
6.15 	of money to cover the estimated costs of claims incurred but unpaid. The State Board of 
6.16 	Investment shall invest the money according to section  11A.24. Investment income and 
6.17 	losses attributable to the fund must be credited to the fund. 
6.18 	(b) If the board determines that the funds in the insurance trust fund are inadequate to 
6.19 	meet the board's obligations, the board may access additional funds as needed in the form 
6.20 	of loans from the health care access fund, not to exceed a total indebtedness of $2,000,000 
6.21 	at any one time. Such loans accrue interest at three percent per annum simple interest and 
6.22 	must be repaid in installments beginning no later than two years after the board first 
6.23 	provides coverage and must be fully repaid no later than five years after that date. The 
6.24 	monthly repayment installments must be reamortized as needed to reflect repayments and 
6.25 	additional loan amounts accessed, so that monthly installments will be sufficient to repay 
6.26 	the existing balance, including accrued interest, at the end of that five-year period. The 
6.27 	$2,000,000 amount is available until the end of that five-year period. Amounts of principal 
6.28 	repaid are available to be accessed for new loans within that period.
6.29 		Subd. 10.Exemption. The public employee insurance program and, where 
6.30 	applicable, the employers participating in it, are exempt from chapters 60A, 62A, 62C, 
6.31 	62D, 62E, and 62H, section  471.617, subdivisions 2 and 3, and the bidding requirements 
6.32 	of section  471.6161, except:
6.33 	(1) as otherwise provided in subdivision 6, paragraph (a); and 
6.34 	(2) that the program is subject to the assessment for the Minnesota Comprehensive 
6.35 	Health Association under section 62E.11, if the type of coverage provided would be 
6.36 	subject to that assessment if provided by a contributing member of that association. 
7.1 		Subd. 11.Reinsurance. The board may, on behalf of the program, participate in an 
7.2 	insured or self-insured reinsurance pool.
7.3 		Subd. 12.Commissioner of commerce. The program's premiums and other 
7.4 	decisions relevant to financial solvency must be submitted to the commissioner of 
7.5 	commerce for prior approval. The premiums and other decisions are deemed approved if 
7.6 	not disapproved within 60 days of their submission to the commissioner.

7.7 	Sec. 2. Minnesota Statutes 2004, section 43A.317, is amended to read:
7.8 	43A.317 MINNESOTA EMPLOYEES INSURANCE PROGRAM.
7.9 		Subdivision 1.Intent. The legislature finds that the creation of a statewide program 
7.10 	to provide employers with the advantages of a large pool for insurance purchasing would 
7.11 	advance the welfare of the citizens of the state.
7.12 		Subd. 2.Definitions. (a) Scope. For the purposes of this section, the terms defined 
7.13 	have the meaning given them. 
7.14 	(b)  Commissioner Board."Commissioner" means the commissioner of employee 
7.15 	relations. "Board" means the board of directors created under subdivision 4.
7.16 	(c)  Eligible employee. "Eligible employee" means an employee eligible to 
7.17 	participate in the program under the terms described in subdivision 6. 
7.18 	(d)  Eligible employer. "Eligible employer" means an employer eligible to 
7.19 	participate in the program under the terms described in subdivision 5. 
7.20 	(e)  Eligible individual. "Eligible individual" means a person eligible to participate 
7.21 	in the program under the terms described in subdivision 6. 
7.22 	(f)  Employee. "Employee" means an employee of an eligible employer. "Employee" 
7.23 	includes a sole proprietor, partner of a partnership, member of a limited liability company, 
7.24 	or independent contractor. 
7.25 	(g)  Employer. "Employer" means a private person, firm, corporation, partnership, 
7.26 	limited liability company, association, or other entity actively engaged in business or 
7.27 	public services. "Employer" includes both for-profit and nonprofit entities. 
7.28 	(h)  Program. "Program" means the Minnesota employees insurance program 
7.29 	created by this section. 
7.30 		Subd. 3.Entity status and administration. After consulting with the chairs of the 
7.31 	senate Governmental Operations and Veterans Committee and the house of representatives 
7.32 	Governmental Operations and Veterans Affairs Policy Committee, the commissioner 
7.33 	may determine when the program provided under this section is available. When the 
7.34 	commissioner makes the program available, The board is created and may operate as an 
7.35 	unincorporated association and may incorporate as a Minnesota nonprofit corporation 
8.1 	under chapter 317A. The board shall have all powers available under that chapter, except 
8.2 	to the extent inconsistent with this section.  The commissioner board shall, consistent 
8.3 	with the provisions of this section, administer the program and determine its coverage 
8.4 	options, funding and premium arrangements, contractual arrangements, and all other 
8.5 	matters necessary to administer the program. The commissioner's contracting authority 
8.6 	for the program, including authority for competitive bidding and negotiations, is governed 
8.7 	by section  43A.23.
8.8 		Subd. 4.Advisory committee Board of directors. After the commissioner 
8.9 	consults as required in subdivision 3 and then determines to make the program available,
8.10 	The commissionergovernor shall establish a appoint an initial ten-member advisory 
8.11 	committee board of directors that includes five members who represent eligible employers 
8.12 	andfive, two members who represent eligible individuals. The committee shall advise 
8.13 	the commissioner on issues related to administration of the program. The committee is 
8.14 	governed by sections  15.014 and  15.059, and continues to exist while the program remains 
8.15 	in operation, and three public members, for initial terms of two years for five directors and 
8.16 	three years for the other five directors. Subsequent board members shall be appointed by 
8.17 	the governor to serve staggered three-year terms. 
8.18 		Subd. 5.Employer eligibility. (a) Procedures. All employers are eligible for 
8.19 	coverage through the program subject to the terms of this subdivision. The commissioner
8.20 	board shall establish procedures for an employer to apply for coverage through the 
8.21 	program. 
8.22 	(b)  Term. The initial term of an employer's coverage may must be for up to at least
8.23 	two years from the effective date of the employer's application. After that, coverage 
8.24 	will be automatically renewed for an additional term of two years unless the employer 
8.25 	gives notice of withdrawal from the program according to procedures established by 
8.26 	the commissioner board or the commissioner board gives notice to the employer of the 
8.27 	discontinuance of the program. The commissioner board may establish conditions under 
8.28 	which an employer may withdraw from the program prior to the expiration of a term, 
8.29 	including by reason of an increase in health coverage premiums of 50 percent or more 
8.30 	from one insurance year to the next. An employer that withdraws from the program may 
8.31 	not reapply for coverage for a period of time equal to its initial term of coverage two years. 
8.32 	(c)  Minnesota work force. An employer is not eligible for coverage through the 
8.33 	program if five 50 percent or more of its eligible employees work primarily outside 
8.34 	Minnesota, except that an employer that either does or does not meet that requirement 
8.35 	may apply to the program on behalf of only those employees who work primarily in 
8.36 	Minnesota, and the board may accept or reject the application. 
9.1 	(d)  Employee participation; aggregation of groups. An employer is not eligible 
9.2 	for coverage through the program unless its application includes all eligible employees 
9.3 	who work primarily in Minnesota, except employees who waive coverage as permitted by 
9.4 	subdivision 6. Private entities that are eligible to file a combined tax return for purposes 
9.5 	of state tax laws are considered a single employer, except as otherwise approved by the 
9.6 	commissioner board. 
9.7 	(e)  Private employer. A private employer is not eligible for coverage unless it has 
9.8 	two or more eligible employees who live in the state of Minnesota. If an employer has 
9.9 	only two eligible employees and one is the spouse, child, sibling, parent, or grandparent of 
9.10 	the other, the employer must be a Minnesota domiciled employer and have paid Social 
9.11 	Security or self-employment tax on behalf of both eligible employees. 
9.12 	(f)  Minimum participation. The commissioner must require as a condition of 
9.13 	employer eligibility that at least 75 percent of its eligible employees who have not waived 
9.14 	coverage participate in the program. The participation level of eligible employees must be 
9.15 	determined at the initial offering of coverage and at the renewal date of coverage. For 
9.16 	purposes of this section, waiver of coverage includes only waivers due to coverage under 
9.17 	another group health benefit plan. eligible for waiver under section 62L.03, subdivision 3, 
9.18 	paragraph (a). An employer may not offer any employee coverage other than that offered 
9.19 	by the board, expect with prior approval of the board.
9.20 	(g)  Employer contribution. The commissioner board must require as a condition 
9.21 	of employer eligibility that the employer contribute at least 50 percent toward the cost 
9.22 	of the premium of the employee and may require that the contribution toward the cost 
9.23 	of coverage is structured in a way that promotes price competition among the coverage 
9.24 	options available through the program. 
9.25 	(h)  Enrollment cap. The commissioner board may limit employer enrollment in the 
9.26 	program if necessary to avoid exceeding the program's reserve capacity. 
9.27 		Subd. 6.Individual eligibility. (a) Procedures. The commissioner board shall 
9.28 	establish procedures for eligible employees and other eligible individuals to apply for 
9.29 	coverage through the program. 
9.30 	(b)  Employees. An employer shall determine when it applies to the program the 
9.31 	criteria its employees must meet to be eligible for coverage under its plan. An employer 
9.32 	may subsequently change the criteria annually or at other times with approval of the 
9.33 	commissioner board. The criteria must provide that new employees become eligible for 
9.34 	coverage after a probationary period of at least 30 days, but no more than 90 days. 
9.35 	(c)  Other individuals. An employer may elect to cover under its plan: 
10.1 	(1) the spouse, dependent children, and dependent grandchildren of a covered 
10.2 	employee;
10.3 	(2) a retiree who is eligible to receive a pension or annuity from the employer and a 
10.4 	covered retiree's spouse, dependent children, and dependent grandchildren;
10.5 	(3) the surviving spouse, dependent children, and dependent grandchildren of a 
10.6 	deceased employee or retiree, if the spouse, children, or grandchildren were covered 
10.7 	at the time of the death;
10.8 	(4) a covered employee who becomes disabled, as provided in sections  62A.147
10.9 	and  62A.148; or 
10.10 	(5) any other categories of individuals for whom group coverage is required by 
10.11 	state or federal law.
10.12 	An employer shall determine when it applies to the program the criteria individuals 
10.13 	in these categories must meet to be eligible for coverage. An employer may subsequently 
10.14 	change the criteria annually, or at other times with approval of the commissioner board. 
10.15 	The criteria for dependent children and dependent grandchildren may be no more 
10.16 	inclusive than the criteria under section  43A.18, subdivision 2. This paragraph shall 
10.17 	not be interpreted as relieving the program from compliance with any federal and state 
10.18 	continuation of coverage requirements. 
10.19 	(d)  Waiver and late entrance. An eligible individual may waive coverage at the 
10.20 	time the employer joins the program or when coverage first becomes available. The 
10.21 	commissioner board may establish a preexisting condition exclusion of not more than 18 
10.22 	months for late entrants as defined in section  62L.02, subdivision 19. 
10.23 	(e)  Continuation coverage. The program shall provide all continuation coverage 
10.24 	required by state and federal law. 
10.25 		Subd. 7.Coverage. Coverage is available through the program beginning on 
10.26 	July 1, 1993. Until an arrangement is in place to provide coverage may be provided
10.27 	through a transfer of risk to one or more carriers regulated under chapter 62A, 62C, or 
10.28 	62D, the commissioner shall solicit bids under section  43A.23, from carriers regulated 
10.29 	under chapters 62A, 62C, and 62D, to provide coverage of eligible individuals. The 
10.30 	commissioner shall provide coverage through contracts with carriers, unless the 
10.31 	commissioner receives no reasonable bids from carriers; through a group self-insured 
10.32 	arrangement under chapter 62H; or through a combination of those methods. The board 
10.33 	may, on behalf of the program, participate in an insured or self-insured reinsurance pool. 
10.34 	(a)  Health coverage. Health coverage is available to all employers in the program. 
10.35 	The commissioner board shall attempt to establish health coverage options that have 
10.36 	strong care management features to control costs and promote quality and shall attempt to 
11.1 	make a choice of health coverage options available. Health coverage for a retiree who 
11.2 	is eligible for the federal Medicare program must be administered as though the retiree 
11.3 	is enrolled in Medicare parts A and, B, and D. To the extent feasible as determined by 
11.4 	the commissioner and in the best interests of the program, the commissioner shall model 
11.5 	coverage after the plan established in section  43A.18, subdivision 2. Health coverage 
11.6 	must include at least the benefits required of a carrier regulated under chapter 62A, 62C, 
11.7 	or 62D for comparable coverage. Coverage under this paragraph must not be provided 
11.8 	as part of the health plans available to state employees.
11.9 	(b)  Choice of providers. All benefits provided by the program relating to expenses 
11.10 	incurred for medical treatment or services of a health care provider must also include 
11.11 	treatment and services of any other licensed, certified, or registered health care provider to 
11.12 	the extent that the services and treatment are within the scope of the provider's licensure, 
11.13 	certification, or registration.
11.14 	(c) Optional coverages. In addition to offering health coverage, the commissioner
11.15 	board may arrange to offer dental or other health-related coverage through the program. 
11.16 	Employers with health coverage may choose to offer dental or other health-related 
11.17 	coverage according to the terms established by the commissioner board. 
11.18 	(c) (d)Open enrollment. The program must meet all underwriting requirements of 
11.19 	chapter 62L and must provide periodic open enrollments for eligible individuals for those 
11.20 	coverages where a choice exists. 
11.21 	(d) (e)Technical assistance. The commissioner board may arrange for technical 
11.22 	assistance and referrals for eligible employers in areas such as health promotion and 
11.23 	wellness, employee benefits structure, tax planning, and health care analysis services 
11.24 	as described in section  62J.2930. 
11.25 		Subd. 8.Premiums. (a) Payments. Employers enrolled in the program shall pay 
11.26 	premiums according to terms established by the commissioner board. If an employer 
11.27 	fails to make the required payments, the commissioner board may cancel coverage and 
11.28 	pursue other civil remedies. 
11.29 	(b)  Rating method. The commissioner board shall determine the premium rates and 
11.30 	rating method for the program. The rating method for eligible small employers must meet 
11.31 	or exceed the requirements of chapter 62L. The rating methods must recover in premiums 
11.32 	all of the ongoing costs for state administration and for maintenance of a premium stability 
11.33 	and claim fluctuation reserve. On June 30, 1999, after paying all necessary and reasonable 
11.34 	expenses, the commissioner must apply up to $2,075,000 of any remaining balance in 
11.35 	the Minnesota employees' insurance trust fund to repayment of any amounts drawn or 
11.36 	expended for this program from the health care access fund.The board may decide to rate 
12.1 	specific employers separately for premium purposes, if the board determines that doing 
12.2 	so is in the best interests of the program.
12.3 	(c)  Taxes and assessments. To the extent that the program operates as a self-insured 
12.4 	group, the premiums paid to the program are not subject to the taxes imposed by chapter 
12.5 	297I, but the program is subject to a Minnesota Comprehensive Health Association 
12.6 	assessment under section  62E.11. 
12.7 		Subd. 9.Minnesota employees insurance trust fund. (a) Contents.The Minnesota 
12.8 	employees insurance trust fund in the state treasury consists of deposits received from 
12.9 	eligible employers and individuals, contractual settlements or rebates relating to the 
12.10 	program, investment income or losses, and direct appropriations. 
12.11 	(b)  Appropriation.All money in the fund is appropriated to the commissioner to 
12.12 	pay insurance premiums, approved claims, refunds, administrative costs, and other costs 
12.13 	necessary to administer the program. 
12.14 	(c)Reserves.(a) For any coverages for which the program does not contract to 
12.15 	transfer full financial responsibility, the commissioner board shall establish and maintain 
12.16 	reserves: 
12.17 	(1) for claims in process, incomplete and unreported claims, premiums received but 
12.18 	not yet earned, and all other accrued liabilities; and
12.19 	(2) to ensure premium stability and the timely payment of claims in the event of 
12.20 	adverse claims experience. The reserve for premium stability and claim fluctuations must 
12.21 	be established according to the sound actuarial standards of section  62C.09, subdivision 3, 
12.22 	except that the reserve may exceed the upper limit under this standard until July 1, 1997. 
12.23 	(d)  Investments.The State Board of Investment shall invest the fund's assets 
12.24 	according to section  11A.24. Investment income and losses attributable to the fund must 
12.25 	be credited to the fund. 
12.26 	(b) If the board determines that its reserves are inadequate, the board may access 
12.27 	additional funds as needed in the form of loans from the health care access fund, not to 
12.28 	exceed a total indebtedness of $2,000,000 at any one time. Such loans accrue interest at 
12.29 	three percent per annum simple interest and must be payable in monthly installments 
12.30 	beginning no later than two years after the board first provides coverage and must be fully 
12.31 	repaid no later than five years after that date. The monthly repayment installments must be 
12.32 	reamortized as needed to reflect repayments and additional loan amounts accessed, so that 
12.33 	monthly installments will be sufficient to repay the existing balance, including accrued 
12.34 	interest, at the end of that five-year period. The board may make additional repayments of 
12.35 	principal and interest at any time. The $2,000,000 amount is available until the end of 
13.1 	that five-year period. Amounts of principal repaid are available to be accessed for new 
13.2 	loans within that period.
13.3 		Subd. 10.Program status. The Minnesota employees insurance program is a state 
13.4 	program to provide the advantages of a large pool to small employers for purchasing
13.5 	providing health coverage, other coverages, and related services from insurance 
13.6 	companies, health maintenance organizations, and other organizations. The program is not 
13.7 	an insurance company. Coverage under this program shall be considered a certificate of 
13.8 	insurance or similar evidence of coverage and is subject to all applicable requirements 
13.9 	of chapters 60A, 62A, 62C, 62E, 62H, 62L, and 72A, and is the coverage, premiums, 
13.10 	and reserves are subject to regulation by the commissioner of commerce to the extent 
13.11 	applicable.
13.12 		Subd. 12.Status of agents. Notwithstanding sections  60K.49 and  72A.07, the 
13.13 	program may use, and pay referral fees, commissions, or other compensation to, agents 
13.14 	licensed as insurance producers under chapter 60K or licensed under section  62C.17, 
13.15 	regardless of whether the agents are appointed to represent the particular health carriers or 
13.16 	community integrated service networks that provide the coverage available through the 
13.17 	program. When acting under this subdivision, an agent is not an agent of the health carrier 
13.18 	or community integrated service network, with respect to that transaction. 

13.19 	Sec. 3. APPROPRIATIONS.
 13.20 	(a) $2,000,000 is appropriated from the health care access fund to the insurance trust 
13.21 	fund for the purpose of the as-needed loans to the Public Employees Insurance Program, 
13.22 	as provided in Minnesota Statutes, section 43A.316, subdivision 9, paragraph (b).
13.23 	(b) $2,000,000 is appropriated from the health care access fund to the commissioner 
13.24 	of commerce for the as-needed loans to the Minnesota Employees Insurance Program, as 
13.25 	provided in Minnesota Statutes, section 43A.317, subdivision 9, paragraph (b).

13.26 	Sec. 4. REVISOR'S INSTRUCTION.
 13.27 	The revisor of statutes shall recode:
13.28 	(1) Minnesota Statutes, section 43A.316, as Minnesota Statutes, section 62U.15; and 
13.29 	(2) Minnesota Statutes, section 43A.317, as Minnesota Statutes, section 62U.16.